5 Tips for Increasing Credit Limits

Having higher credit limits means you have more buying power. It shows that your lender trusts that you can handle and pay back that limit, should it ever be used.  Often times, when people are first starting out on their credit journey, their limits are pretty low.  With time and good habits, lenders will be increasing your credit limits without you asking.

However, just because a lender isn’t increasing credit limits doesn’t mean you aren’t worthy or eligible. Sometimes all you have to do is ask. The CGS Team is sharing a few tips to help make you more eligible before and during a credit limit increase request. Proceed with caution. Higher credit limits do not give you a pass to start charging more!

Tips for Increasing Your Credit Limits

#1: Use Your Cards Often and Pay them Off

A great way to show your lender that you are responsible enough to handle a credit line increase is to use your cards regularly and pay them off after use. This may require you to use your cards for more purchases and pay it off several months in a row. If you don’t typically use your credit card for much, start switching your debit card purchases with your credit card. Use the cash that you would have used to pay for the purchase to pay the credit card off instead.

#2: Choose the Best Card

If you have multiple credit cards, choose the card that would be best suited for handling a higher limit. For example, a store credit card like Macy’s or Victoria’s Secret would not be a great card because you can only use it at those stores. Opt for a card that has a great rewards program, that way you can get more bang for your buck with a higher limit.  It’s important to decide which card you want to request an increase on and stick with it. Asking for increases on multiple cards could result in multiple denials, and that’s never good.

#3: Check Your Credit Score before Requesting the Increase

Most of the time, small credit limit increases don’t require credit inquiries. The lender can base your request off of the payment history you have with them.  When you are looking to request large limit increases, the lender may check your credit report. They are checking to see if you have other debts and how well you are paying them off.

Depending on how much of an increase you are looking for, it may be best to check your score before asking. If you score is in the good range (above 700), you should be good to go. Anything less may result in a denial of your request. Give your credit score a boost and then revisit the request.

#4: Wait Until You Get a Raise

An increase in income usually means you will be able to cover the expenses that are associated with higher credit limits. If a raise is on the horizon, wait until it’s official before asking for the credit limit increase. Letting your lender know that you have more income will certainly help you chances of being approved for a higher limit. You may be asked to show proof of your increase income, so be honest here!

#5: Don’t Ask for Too Much

Typically when customers reach out to their lenders for a credit limit increase, the lender is open to hearing how much of an increase the customer would prefer. The lender often bases their approval decision on how much you request. Don’t expect your credit limit to be doubled. Stick to an increase of 10 to 25% to be safe.  If you ask for too much and get declined, you may have to wait a few months before asking again.

Related: 4 Reasons Why Your Credit Limit was Lowered

 

There is definitely some strategy involved with increasing credit limits. Make sure your spending and payment habits are up to par before considering such a request.  Have a solid budget plan in place to help keep you focused on staying on track.  Have you requested a credit limit increase in the past? Have you been automatically increased without asking? We’d love to hear your experiences! Post a reply comment below to share.

-The CGS Team

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